AGUDELO, Christian Jorge P.
BSAc-I, Mgt 101-A
November 24, 2014
A Sole Proprietorship is a business with one owner who operates the business on his or her own or employ employees. It is the simplest and the most numerous form of business organization in the United States, however it is dangerous as the sole proprietor has total and unlimited liability. Self contractor is one example of a sole proprietorship. The advantage of organizing your business as a sole proprietorship is that the process is simple and inexpensive, compared to other organizational structures. A sole proprietorship can only be started by an individual business owner. If a business has employees, it cannot structure as a sole proprietorship. Another advantage of sole proprietorship is that tax time is less complicated. The business owner does not have to pay corporate taxes. All profits made are reported on the business owner's personal tax return as personal income. Advantages of a sole proprietorship
1. Simplest and least expensive form of business to establish and to dissolve. 2. The owner is making all the decisions and controlling the whole operations. 3. All profit flows directly to the owner.
4. It is subject to fewer regulations.
5. It has tax advantage: any income is declared as the owner’s personal income tax return, therefore there are no corporate income taxes. Disadvantages of a sole proprietorship
1. The owner is responsible for all the obligations of the business. 2. It is difficult to raise capital: it can only use the owner’s personal saving and consumer loans.
A Partnership is a business with two or more individuals owns and manages the business. Partners share the unlimited liabilities of the business and operate the business together. There are three classification of partnerships: general partnership (partner divide responsibility, liability and profit or loss according to their agreement), limited partnership (in...
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